<DrumBeat: March 25, 2007The Oil DrumDrumBeat: March 26, 2007>

20 comments on Just Gazpromming along

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Gail the Actuary on March 25, 2007 - 9:18pm Permalink | Subthread | Comments top

US imports of natural gas from Canada are expected to decline in the next few years. I understand the hope is to import LNG to make up for this shortfall. Additional LNG will also be needed to offset the growing gap between US demand and declining US production.

What kinds of overseas arrangements is the US making to assure that sufficient LNG will be available? You mention the US trying to seek resources around the Caspian, including an agreement with Azerbaijan. This appears only to be pipeline natural gas. Is there anything "in the works" to assure that there will be more LNG on the world market?

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Heading Out on March 25, 2007 - 9:40pm Permalink | Subthread | Parent | Comments top

For LNG systems to work there are four things that have to be in place. The first is a reliable supply of natural gas (ensuring an adequate return on the investment required for the remaining three); then there must be a liquefaction facility; an adequate supply of LNG tankers, and a regasification facility at the far end. One cannot create domestic acceptance of a regasification facility, and there has been some considerable debate as to where the additional facilities will ultimately end up I gave some information here , Glenn has written about the one on Long Island Sound, bunyonhead has written about the coming plants in the UK, and Dave has an excellent primer on the topic.

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Gail the Actuary on March 25, 2007 - 10:29pm Permalink | Subthread | Parent | Comments top

I was trying to ask about the first of the first two of the things listed - the reliable supply and the liquefaction facilities. If we can't get that far, the LNG tankers and the regasification facilities at our end don't matter.

The article sounds like we are working at least somewhat on the reliable supply issue - but is this going to actually lead to a significant increase in the amount of LNG on the world market?

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Heading Out on March 25, 2007 - 11:11pm Permalink | Subthread | Parent | Comments top

Qatar is probably the largest producer . Nigeria also has several trains working, the Angolan LNG site has a really cool intro that makes it worth a visit just for that, and Algeria has been doing it the longest . There is a more comprehensive list here

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Heading Out on March 25, 2007 - 11:24pm Permalink | Subthread | Parent | Comments top

Oops, I also missed Australia , Yemen which all of a sudden is having some problems, and Iran . At one time Indonesia was very prominent, but it has been having problems and has not been fulfilling some contracts, as well as having domestic use issues.

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Boof on March 26, 2007 - 8:13am Permalink | Subthread | Parent | Comments top

Here's some factors which could undercut Australia's LNG exports when present contracts have expired;
1) a northwest to southeast transcontinental pipeline
2) large truck fleets switching from diesel to CNG
3) fear of future carbon taxation leading to more combined cycle gas fired generation and backup for renewables.

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Buckler on March 27, 2007 - 2:14am Permalink | Subthread | Parent | Comments top

Actually after some more research, I see that Dave Cohen covered the Pars field in his article in (June 2006 http://www.theoildrum.com/story/2006/6/8/155013/7696#comments) -- and provides a link to a Simmons & Co report on the Pars gas field http://www.simmonsco-intl.com/files/Qatar%20Report.pdf

According to the report:
"By 2015, Qatar will account for approximately 1/4th of the world’s LNG liquefaction capacity. Calculated differently, approximately 1/3rd of the expected growth in global LNG supplies from now through 2015 are expected to come from the North field (Pars) alone."

Thus, LNG expansion depends to a large degree on a gas field (Pars) that is not understood fully geologically (from the Simmons report) and could be disputed territorially by Iran and Qatar.

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Buckler on March 26, 2007 - 6:16pm Permalink | Subthread | Parent | Comments top

Middle Eastern reserves are mainly in Qatar and Iran. What is interesting is that Qatar's main gas field, Pars, -- and the largest gas field in the world -- is offshore and is split between Iran and Qatar (North Pars lies in Iranian terrority and South Pars in Qatari terrority). http://en.wikipedia.org/wiki/North_Field Whether this slows down development remains to be seen.

Most projections of LNG growth rely heavily on Qatar's contribution. I have yet to see any analysis that takes into account the fact that Pars lies half in Iran and half in Qatar -- whether this could cause delays, considering the tense political situation regarding Iran.

Note that supply is going/is a large problem for LNG, as 56% of the world's known gas reserves are uncommitted, but 84% of the uncommitted reserves are in the Middle East and the FSU.

Russia is not enthusiastic about committing its reserves to LNG (mainly the gas is in Russia with smaller fields in Khazahstan and Turkmenistan). The FSU's gas fields with the exception of Shtokman are far removed from sea lanes.

By the way, there are several very good presentations on LNG supply and other issues at Jensen Associates here: http://www.jai-energy.com/index.php?page=pubs

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